Ottawa proposes permanent immediate expensing for wider business investment

The federal government has proposed making immediate expensing available on a permanent basis for roughly two-thirds of business capital investment.

The measure, labelled the Productivity Mega Deduction, would expand the share of investment eligible for immediate expensing from about 15% under Budget 2025. Assets outside the proposal would continue to use the Accelerated Investment Incentive.

Finance Canada estimates the incremental fiscal cost at $36 billion over five years, beginning in 2026–27.

The government projects that the measure could increase annual economic output by as much as $22 billion and support 80,000 jobs ten years from now. Those are modelling estimates, not guaranteed outcomes.

The proposal still requires the relevant legislative and implementation steps. Businesses should rely on enacted tax law and professional advice for decisions rather than treating the announcement as individualized tax guidance.

Source

Department of Finance Canada: Proposed Productivity Mega Deduction, published September 15, 2026.